…going dark as a $15 wage looms.
Morons. I find it particularly amusing that they are so precise in what they think the right number is, with Obama’s imbecilic $10.10. It’s like when Roosevelt arbitrarily raised the price of gold twenty-one cents “because it was three times seven.”
The current law will pump Seattle’s minimum wage up to $11 per hour this April. $15 per hour happens over a longer time frame. I also see the usual dumb comments about how we didn’t want those marginal businesses and their jobs anyway. For example:
“walter cook” brags about how well his alleged businesses are doing while neglecting that his businesses would be pulling in substantially less profit because of that increase in minimum wage – more than a third of his profit (the 7% figure is apparently the estimated percentage of revenue that would go to increased wages) for the full service and more than a quarter of the profit for the fast food business. Where’s the money he’ll need to reinvest in or expand his businesses and hire more workers? I bet he’s counting on reduced competition to keep his profits up.
He also ignores that the 7% profit business can improve and become more profitable down the road, assuming they stay in business. But maybe that’s because it becomes a hefty competitive advantage for him.
You ignore the fact that they can increase prices to compensate for the added cost.
@Godzilla,
Please, please, please tell us that your comment was meant in a sarcastic way.
If not, I can’t believe you have the mental fortitude to get out of bed in the morning, much less post here.
Hmmm, raise the prices of food, artificially, just to match the artificial raise in labor costs. Surely this well thought out plan couldn’t fail. I’m sure everyone will be very happy to spend 10, 20, or even 30% more for the same item, you know, just because.
In case you have never heard of economics, there is a thing called “Supply and Demand”. Increase the price of something, then the demand for it goes down, making it harder to sell.
“In case you have never heard of economics, there is a thing called ‘Supply and Demand'”.
Most “liberals” have, I think, have heard of the dreaded law of Supply and Demand; but to them it’s like a boogeyman in their closet, and if they just pull the covers up over their heads and ignore it, it will go away.
“Welch illustrates this point using two types
of restaurants that are close substitutes in consumption (ethnic
restaurants vs. fast food restaurants), but that differ in their
factor intensities of low-wage labor.60 An increase in the minimum
wage will tend to cause larger price increases at the restaurants
where low-wage labor is a higher share of total costs
because the higher minimum wage will have a larger impact on
those firms’ production costs.61 If consumers respond to this
relative price change by shifting their demand toward the restaurants
with smaller price increases, employment at the restaurants
that employ fewer low-wage workers will fall by less—
and could actually rise—in response to the increase in the minimum
wage, while job losses would be that much greater at the
low-wage intensive restaurants”
http://www.minnesotalawreview.org/wp-content/uploads/2012/01/Wascher_FinalPDF.pdf
Higher prices mean fewer customers. In this case, people who live on the fringe of the Seattle will just drive where the food is as good and the costs are lower.
= economics.
Which ignores the fact that increased prices tend to decrease sales.
Weird. Godzilla’s was the very last comment visible — until I commented. Then I see I’m way down the list. WTF?
This site’s been like that for a long time: it shows only a few comments, then you post, and you can now see all of them.
I see the ‘but companies won’t cut jobs because they only hire essential people, so they can’t get rid of them!’ lefty talking point made it to the comments there, too. Someone posts it to just about every discussion I see on the minimum wage, so it has to be from some ‘potted answers to minimum wage questions’ page somewhere.
For me, every so often, Rand’s site comes up in a bare bones format, without nested comments. If I click on one of the headers, the usual format usually comes up, though it occasionally remains bare bones. But, often, it will come up showing just a few comments instead of the full number indicated by the comment link.
It may be browser issues. I generally use Firefox. I haven’t checked using another browser yet. Maybe I will next time it happens.
Using Firefox here too; before the recent update, half the time I’d get the Mobile site and half the time I’d get the Desktop site. That hasn’t happened since the update, so hopefully that particular Kraken has been slain.
Depends on which firm can create a competitive advantage as all firms wages rise. Some firms will creatively innovate others will not, prices can rise, stay the same or even fall under the competitive pressures.
Seattle has seen a lot of growth since the last census and this is just Seattle’s way to get rid of the rif raf. They don’t like poor people who eat fast food. They don’t like the poor people who work at these restaurants. They don’t like these restaurants.
I read an article in some “liberal” periodical–I forget the name but it could have been “The New Statef*cker”–promoting an increase in the State-mandated (as opposed to market-mandated) minimum wage, and the author acknowledged at an increase in the minimum wage above the market price for labor COULD, conceivably, reduce the demand for labor; but he felt that the minimum wage could still be hiked at gun-point (you know, the way the State hikes prices) up to a certain level without causing unemployment. He said something like, “Experts are generally in agreement we could probably go as high as ten dollars without ill effect.” One could ask, “What experts? The State’s ‘court’ economists?” But I was more interested in what tea-leaves or Magic Eight Ball came up with the ten dollar figure.
In the end, it makes no difference, as the minimum wage workers are still competing with other minimum wage earners for the same general pool of goods. If that doesn’t expand, then you just get inflation, and nobody gets better off.
The only ones who benefit are those who go on a consumption binge early, before prices have settled back out to the level which balances supply with demand.
People who are making minimum wage are not the ones going on consumption benders. And the timing has to be right, too. Not many minimum wage earners are into insider trading, I’d wager.
The minimum wage can be increased without losing a significant number of jobs, up to the point where it’s the lowest wage any significant number of workers are currently being paid.
Around here, for example, the commodity boom has pushed so much money into the economy that it’s hard to find anyone remotely competent for minimum wage. The real ‘minimum wage’ is at least a couple of dollars above the government-set minimum wage, so an increase of a couple of dollars would have negligible impact. Of course, with the commodity boom running out, that would cost jobs in the future when companies can no longer afford to pay those wages.
@ Edward M. Grant
You’ve answered your own question.
Having the market set the wage is perfectly in line with proper economics and, as you can see, works very well. In the situation you describe, there is ample demand for higher paid workers, combined with more money in the area, leads to higher wages.
The issue here is that the government is artificially setting the wages, usually much higher than the surrounding population area can support. In this situation, the government will inflate the salaries of minimum wage workers above what the market has deemed the proper value. The local merchants will need to (a) raise prices – which just makes the goods these folks buy more expensive, (b) reduce work-force overall hours by either making them take on additional responsibilities or reducing business hours, (c) simply employ fewer workers, or (d) close shop.
None of these are going to lead to economic growth.
Oh dear, Bilwick, you mentioned the state forcing people at gun point. I’m sure bob or Jim are in a tizzy, either laughing at the notion of government holding people at gunpoint or preparing to craft a comment about your paranoia. They’ll show….
Pardon me, I was distracted for a moment. CNN had some breaking news from Ferguson, MO. Alas, just the same stuff about protestors shooting cops after deciding they were too heavy handed. So where was I…
Oh yeah, government use of guns to keep civilians in check. Did you hear about the guy in NYC selling cigarettes on the street?
I’m sure Jim could come up with an expert or two, The same ones who said Obamacare would have no ill effects on insurance rates.
Well, one might simply get more internships- so have internships to wash dishes and/or wait tables.
This means employers might perhaps be more willing to “hire” the spoiled richer kids so these kids can get “work” experience [as part of their social development. One also see that working in internship is also similar to daycare- assuming there some adults in the vicinity].
And this way poorer people can’t afford to have their children get certain types of work experience. And so there is less competition from people who are merely good workers.
Better yet, you could auction off the right to wait the tables, where they’d make money from tips.
I’d guess the left would be complaining about that one, though.
Yes indeed. The Left is zero-sum, where wealth can never be created, only stolen.
Is there an app for that?
or innovate so that worker productivity increases above the wage increase.
That is precisely why McDonald’s is bringing in burger-flipping robots. Fewer employees but the same productivity, so more productivity per employee. Cause: artificially higher wages than the market can bear. Effect: fewer employees. Foreseeability of consequence: 100%.